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Bayesian Persuasion

  • Emir Kamenica
  • Matthew Gentzkow

When is it possible for one person to persuade another to change her action? We consider a symmetric information model where a sender chooses a signal to reveal to a receiver, who then takes a noncontractible action that affects the welfare of both players. We derive necessary and sufficient conditions for the existence of a signal that strictly benefits the sender. We characterize sender-optimal signals. We examine comparative statics with respect to the alignment of the sender's and the receiver's preferences. Finally, we apply our results to persuasion by litigators, lobbyists, and salespeople. (JEL D72, D82, D83, K40, M31)

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Paper provided by www.najecon.org in its series NajEcon Working Paper Reviews with number 814577000000000369.

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Date of creation: 14 Oct 2009
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Handle: RePEc:cla:najeco:814577000000000369
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